PESTLE Analysis evolves around six factor which can influence the environment in which a company operates in. It is an important part of any company’s strategy as it influences the way the business is operated, how the changes are incorporated, how the external and internal changes influence the operations, etc.
PESTLE Analysis is a comprehensive version of SWOT analysis in some aspects. It also help company understand inherent risks which might not be easily visible when seen from a specific point of view and are revealed when the focus and scrutiny is multifaceted.
These six factors are –
- Political Factors like government and governing parties, political parties and related factions and how their policies like tax, fiscal policies, tariffs etc. influence the business.
- Economic Factors like inflation, ease of business etc. can have long lasting impact on the business.
- Social Factors like societal norms, culture, demographics, population etc. have a strong influence on consumer base and workforce, affecting a business both internally and externally.
- Technological Factors like innovation in areas of automation, machine learning etc. can catapult a business into a high gear rapidly.
- Legal Factors can influence an operations by increasing or decreasing risk of doing business and hence influence long term decision making.
- Environmental Factors like natural resources, environmental laws etc. can influence planning for any business